Some competitors, e.g. Tezos, Cardano have reasonable-sounding ideas but are way behind in terms of actual implementation and developer manpower being applied.

To me it seems that EOS is the most viable competitor. The actual blockchain of theirs will go live this summer, but they already have test nets up and running that developers can use to develop applications (though I dunno how easy or hard it is to get started with the current level of documentation, etc). Some of the questions that determine how well EOS does or doesn't do are:

  • How developer-friendly will EOS be compared to Ethereum? This article argues that EOS will be a better choice for dapp developers (, with a bit of discussion for and against some of the articles points in the comments. I don’t have experience with either myself, and I don’t know much about what kind of third party code that is / will be / can be made available for Ethereum to make it more developer friendly.
  • How much flexibility will EOS give for developers language-wise? My impression has been that lots of the popular languages we have today will be possible to use since they’ll be using WebAssembly. After googling WebAssembly a bit more I’m not as optimistic about this as I was, but still think this seems to be an argument in favour of EOS vs Ethereum:, I don’t know if languages that are well-supported by WebAssembly practically speaking will be easy to use to develop on EOS, or if C++ in the beginning or indefinitely will be the de facto choice for EOS developers, but I’m assuming that they chose WebAssembly because they intend for it to be possible to use several different languages, so that more developers can choose a language they already are comfortable with.
  • Practically speaking, when can developers start working on dapps on EOS vs on Cardano? EOS has a test-net ready for dapp developers to work on, and will release the main net this summer, though I don’t know how easy or cumbersome it is to get started. Unless I’m mistaken Cardanos work on smart contracts is pretty early stage, and there hasn’t been set a date yet for when smart contract functionality will be available:
  • Will EOS transactions really be free for most users? This seems to be what they claim, and so far I haven’t come across people arguing that this isn’t the case.
  • Is it the case that regular users of Ethereum applications always will have to pay fees, even if these get really low? As I understand it, one possible solution would be to have dapps give the users money for gas. If this becomes affordable, will it for most dapps be practically doable to “hide” them from users so that it doesn’t make the dapp less user-friendly? I don’t see why it wouldn’t be if gas-fees become low enough, at least for dapps where users have to register accounts, but my understanding is vague. Also, this seems to me like yet another thing that developers will have to think about, unless some easy standardized solution becomes available.
  • For the different levels of speed, scalability and low costs of transactions, will both EOS and Ethereum get there? And if both get there, who will get there first and how large will the time difference between them be? Take for example, a website that runs on a blockchain with an architecture that is similar to the one EOS will be using. Will it become possible to have something like that run on Ethereum without having users wait a lot, pay high fees, and having the network get clogged? My impression is that if this becomes possible on Ethereum it will probably not be a few months after EOS, but years after. Is that impression wrong? I don’t have a full overview of the different upgrades Ethereum are planning and their expected timelines. In this video from September 2017 Vitalik seems to think that Ethereum probably will have the capacity to replace Visa in a couple of years, but with prototypes with lower security having that kind of capacity in about a year: He also seems to think that running something like Starcraft on Ethereum will be possible at some point thanks to second-layer systems. Here are some comments regarding the capacity of EOS (the video moves on to other topics at 2:02):
  • How will they compare in terms of funding for projects? I don't know, though I know that EOS has a pretty big "war chest" of money that will be used to fund projects on their blockchain (

My own guess is that Ethereum will continue to be the number one smart contract platform, but that EOS will do better in terms of percentagewise growth in price from here. That's just the guess that feels most likely to me though, not something I expect neccecarily will happen. I have read a significant amount and watched a significant amount of interviews and so on, but my understanding of this stuff is vague and incomplete.

I have the majority of my money in EOS at this moment, though I'm not sure if that's smart of me or not, and am very much unsure about when I should pull out (now? in a month? this summer?). What makes me most unsure is the possibility of a crash of the whole crypto-market, which may be pretty likely.

In the next two years we should see whether Ethereum's scaling plans work out or not. If they do, I can't understand any plausible future for Bitcoin.

Smart contracts thanks to rootstock? Scaling and lower transaction fees thanks to lightning network? More investments and usage due to first-mover advantage / brand awareness / network effects? These possibilities, which I don't rule out with my current admittedly shallow/vague understanding, makes it seem plausible to me that Bitcoin could continue to be #1 even if Ethereum scales successfully.

A LessWrong Crypto Autopsy

by Scott Alexander 3 min read28th Jan 2018126 comments


Wei Dai, one of the first people Satoshi Nakamoto contacted about Bitcoin, was a frequent Less Wrong contributor. So was Hal Finney, the first person besides Satoshi to make a Bitcoin transaction.

The first mention of Bitcoin on Less Wrong, a post called Making Money With Bitcoin, was in early 2011 - when it was worth 91 cents. Gwern predicted that it could someday be worth "upwards of $10,000 a bitcoin". He also quoted Moldbug, who advised that:

If Bitcoin becomes the new global monetary system, one bitcoin purchased today (for 90 cents, last time I checked) will make you a very wealthy individual...Even if the probability of Bitcoin succeeding is epsilon, a million to one, it's still worthwhile for anyone to buy at least a few bitcoins now...I would not put it at a million to one, though, so I recommend that you go out and buy a few bitcoins if you have the technical chops. My financial advice is to not buy more than ten, which should be F-U money if Bitcoin wins.

A few people brought up some other points, like that if it ever became popular people might create a bunch of other cryptocurrencies, or that if there was too much controversy the Bitcoin economy might have to fork. The thread got a hundred or so comments before dying down.

But Bitcoin kept getting mentioned on Less Wrong over the next few years. It's hard to select highlights, but one of them is surely Ander's Why You Should Consider Buying Bitcoin Right Now If You Have High Risk Tolerance from January 2015. Again, people made basically the correct points and the correct predictions, and the thread got about a hundred comments before dying down.

I mention all this because of an idea, with a long history in this movement, that "rationalists should win". They should be able to use their training in critical thinking to recognize more opportunities, make better choices, and end up with more of whatever they want. So far it's been controversial to what degree we've lived up to that hope, or to what degree it's even realistic.

Well, suppose God had decided, out of some sympathy for our project, to make winning as easy as possible for rationalists. He might have created the biggest investment opportunity of the century, and made it visible only to libertarian programmers willing to dabble in crazy ideas. And then He might have made sure that all of the earliest adapters were Less Wrong regulars, just to make things extra obvious.

This was the easiest test case of our "make good choices" ability that we could possibly have gotten, the one where a multiply-your-money-by-a-thousand-times opportunity basically fell out of the sky and hit our community on its collective head. So how did we do?

I would say we did mediocre.

According to the recent SSC survey, 9% of SSC readers made $1000+ from crypto as of 12/2017. Among people who were referred to SSC from Less Wrong - my stand-in for long-time LW regulars - 15% made over $1000 on crypto, nearly twice as many. A full 3% of LWers made over $100K. That's pretty good.

On the other hand, 97% of us - including me - didn't make over $100K. All we would have needed to do was invest $10 (or a few CPU cycles) back when people on LW started recommending it. But we didn't. How bad should we feel, and what should we learn?

Here are the lessons I'm taking from this.

1: Our epistemic rationality has probably gotten way ahead of our instrumental rationality

When I first saw the posts saying that cryptocurrency investments were a good idea, I agreed with them. I even Googled "how to get Bitcoin" and got a bunch of technical stuff that seemed like a lot of work. So I didn't do it.

Back in 2016, my father asked me what this whole "cryptocurrency" thing was, and I told him he should invest in Ethereum. He did, and centupled his money. I never got around to it, and didn't.

On the broader scale, I saw what looked like widespread consensus on a lot of the relevant Less Wrong posts that investing in cryptocurrency was a good idea. The problem wasn't that we failed at the epistemic task of identifying it as an opportunity. The problem was that not too many people converted that into action.

2: You can only predict the future in broad strokes, but sometimes broad strokes are enough

Gwern's argument for why Bitcoin might be worth $10,000 doesn't match what actually happened. He thought it would only reach that level if it became the world currency; instead it's there for...unclear reasons.

I don't count this as a complete failed prediction because it seems like he was making sort of the right mental motion - calculate the size of the best-case scenario, calculate the chance of that scenario, and realize there's no way Bitcoin wasn't undervalued under a broad range of assumptions.

3: Arguments-from-extreme-upside sometimes do work

I think Moldbug's comment aged the best of all the ones on the original thread. He said he had no idea what was going to happen, but recommended buying ten bitcoins. If Bitcoin flopped, you were out $10. If it succeeded, you might end up with some crazy stratospheric amount (right now, ten bitcoins = $116,000). Sure, this depends on an assumption that Bitcoin had more than a 1/10,000 chance of succeeding at this level, but most people seemed to agree that was true.

This reminds me of eg the argument for cryonics. Most LWers believe there's a less than 10% chance of cryonics working. But if it does work, you're immortal. Based on the extraordinary nature of the benefits, the gamble can be worth it even if the chances of success are very low.

We seem to be unusually fond of these arguments - a lot of people cite the astronomical scale of the far future as their reason for caring about superintelligent AI despite the difficulty of anything we do affecting it. These arguments are weird-sounding, easy to dislike, and guaranteed to leave you worse off almost all the time.

But you only need one of them to be right before the people who take them end up better off than the people who don't. This decade, that one was Bitcoin.

Overall, if this was a test for us, I give the community a C and me personally an F. God arranged for the perfect opportunity to fall into our lap. We vaguely converged onto the right answer in an epistemic sense. And 3 - 15% of us, not including me, actually took advantage of it and got somewhat rich. Good work to everyone who succeeded. And for those of us who failed - well, the world is getting way too weird to expect there won't be similarly interesting challenges ahead in the future.